Summary
Atmos Energy Corporation (ATO) has filed an 8-K report detailing the execution of a new $200 million Revolving Credit Agreement, effective October 15, 2010. This new 180-day facility replaces a previously existing 364-day facility of the same amount, which was set to expire on October 20, 2010. The new credit facility is intended to supplement the company's existing $566.7 million working capital facility and will be used to provide additional working capital. The terms are substantially similar to previous agreements, with interest rates and commitment fees variable based on the company's credit ratings.
Key Highlights
- 1Atmos Energy entered into a new $200 million Revolving Credit Agreement (180 Day Facility) on October 15, 2010.
- 2The new facility replaces a $200 million Revolving Credit Agreement (364 Day Facility) that was due to expire on October 20, 2010.
- 3The credit facility will supplement the company's existing $566.7 million working capital facility.
- 4Borrowings will be used for additional working capital.
- 5Interest rates are variable, dependent on Atmos Energy's credit ratings and based on either a base rate or LIBOR, plus an applicable margin.
- 6Commitment fees on the unused portion of the facility are also variable based on credit ratings.
- 7The new credit facility includes customary covenants, such as limitations on liens, asset sales, and mergers, and a debt to capitalization ratio limit of 0.70 to 1.00.
Frequently Asked Questions
The primary purpose of the new $200 million Revolving Credit Agreement is to provide additional working capital for Atmos Energy Corporation. It also serves to replace an expiring credit facility.
Interest rates depend on Atmos Energy's credit ratings and can be based on a base rate or LIBOR, with an added margin ranging from 0.50% to 2.75%. Commitment fees on the unused portion also vary based on credit ratings, from 0.150% to 0.500%.
The agreement includes standard covenants such as limitations on liens, substantial asset sales, and mergers. A key financial covenant requires the company's debt to capitalization ratio to be less than or equal to 0.70 to 1.00, with specific exclusions for pension liabilities and certain hybrid securities.
No, Atmos Energy terminated the previous 364-day facility concurrently with entering into the new 180-day facility and incurred no early termination penalties.